What is one potential strategy Advertiser B might utilize in a first-price auction?

In a first-price auction, the winning bidder pays the exact amount they bid, making it crucial for advertisers to balance the strategy of bidding high enough to win while not overspending. Keeping their bid lower can provide a strategic advantage, as it allows Advertiser B to potentially win the auction for less than competitors, who may not be bidding as strategically.

By opting for a lower bid, Advertiser B could still win the auction if they are aware of their competitors' bidding behaviors and market conditions. This strategy often involves careful analysis and knowledge of the ad marketplace, considering factors like the estimated value of impressions and competitor spending habits. If Advertiser B can accurately assess the competitive landscape, a lower bid may yield higher return on investment and allow for more flexibility in future bidding.

Bidding above their maximum budget would put Advertiser B at financial risk and is not a sustainable strategy. Submitting similar bids to all competitors could lead to predictability in bidding behavior, allowing competitors to react accordingly. Delaying bids until the last minute may introduce uncertainty and reliance on timing rather than strategic analysis. Therefore, maintaining a lower bid encapsulates a thoughtful approach that aligns with the objectives of a first-price auction.